AirEMS From United States of America, joined May 2004, 684 posts, RR: 2 Posted (8 years 8 months 1 week 1 day 17 hours ago) and read 2464 times:
I was looking at a Piedmont historical website and it stated that in March 1987 Carl Icahn from TWA was interested in merging TWA with Piedmont. Since 1986 Piedmont was in a marketing alliance with TWA at JFK.
My question for all the TWA and Piedmont people is this:
How close was this to happening?
Would this have been better for Piedmont than being bought / merged with USAir?
Would this have improved TWA's longevity or would it still have left the sky in 2001?
That is the best PI resource on the web, AirEMS, but no, TWA would not have survived 9/11 with Piedmont. In fact, if you thought what USAir did to Piedmont was bad, you wouldn't even want to KNOW what Icahn might've pulled. That man ruined arguably the finest airline the world has ever seen (I rate them higher than Pan Am primarily for TW's domestic network--which PA did not have until it was too late) by selling off valuable assets and pocketing the money for himself.
Now if TWA had purchased PI INSTEAD of OZ, then USAir could've picked up a perfect mid-continent hub to balance out their network. The USAir/PSA/Piedmont tri-merger created a huge gap in the middle of the country and USAir did not know how to fill that gap--they spent five years trying to tweak with their network until the West was all gone and the only thing left was an Eastern-centered route system that needed further rationalization--enter Stephen Wolf and you almost get the history of USAir until the present.
The HP/US network is much, much better than what USAir and PSA alone looked like. Check out Airchive and IFlyPSA.com. Both have route maps of the combined USAir/PSA network.
No, Piedmont was much better off, the fleets were compatible, as well as the routes, and USAir needed to acquire bulk to survive in the mid-1980s, as did everyone else. The ones who did not merge or acquire assets from another carrier were not able to weather the storm and ended up filing for bankruptcy in the early 90s. Some made it, others didn't. Hope this answers your questions.
Not very close. At the time Norfolk-Southern (might have still been Norfolk and Western at the time) owned a considerable stake in PI. What started the ball rolling on a possible buyout of PI was N-S' s interest in PI. They were going after a big inter-modal business.
In the last part of the 80's - leveraged buyouts and corporate raiding was the game of the day. TWA under Ichon was a part of this. It seems, if I recall correctly, PI management wasn't interested in a merger that would overleverage PI. I think the US deal resulted in a cash + a large stock swap without leverage. (IIRC)
N-S's filings to purchase PI got US in a bidding war. Difficult to say if this was N-S's goal or not (I tend to think it was). But, the result was that US overpaid for PI, and never really got over it. They are just now starting to use PI's CLT hub to its advantage.
Anyway, I mention all of this because, had TWA tried to purchase PI, N-S would have tried the same stunt. With Ichon at the helm of TWA, they would have never gone for the price that N-S was willing to pay. Nor would have PI exec's agreed to Ichon terms. (I think, anyway)
Quoting AirEMS (Thread starter): Would this have been better for Piedmont than being bought / merged with USAir?
That depends on your point of view. Since ultimately airlines are in business for their shareholders, and US was willing to pay such a premium, it would be difficult to conclude that TWA would have been able to offer PI a better deal. Also, remember, CLT, PI's largest hub, is still intact. Here again, difficult to say former PI folks are worse off. (I know, there will be plenty that disagree, look at the ROA station, a shell of what it once was)
What could have been is N-S being successful in the purchase of PI. I think that if this had been the case, we would still see the brand around. And with a very large cargo operation as well. ( I think it would be thriving as well)
Had TWA been successful, I think we would still be looking at a airline industry similar to today. No PI, No TWA.